We’re excited to announce that SMART Alpha is now integrated and launched on Optimism.
One of our key goals is lowering barriers to entry for people looking to hedge or leverage their assets. The high gas fees on Ethereum L1 makes it prohibitive for both the average retail investor to use SMART Alpha and for the costs associated with epoch advancements on current mainnet pools.
Optimism offers lower gas fees, lower latency, greater throughput, and a world-class developer & user experience. It’s also seeing tremendous growth in liquidity over the past several months.
Starting today, SMART Alpha pools for the following assets are deployed and open for deposits on Optimism:
Until now, all SMART Alpha pools have had an epoch length of one week. Based on demand seen in the BarnBridge community, we are launching 1-day pools exclusively on Optimism. Depending on success metrics and community feedback, we’ll adjust parameters along the way and bring them to other chains as well.
To understand the reasoning behind the shorter epochs, you have to look at the alternative SMART Alpha competes the most against: perpetual swaps. While SA has the benefit of lower fees and Junior positions that can’t be liquidated, perps offer shorter maturities.
Since a lot can change in the markets on a weekly time span, shorter epochs will allow SMART Alpha users to take shorter bets on their positions. And Optimism’s low gas fees makes quicker entry and exits more viable.
Another problem this solves is for pools where the Junior dominance is high. When there is too much leverage available, Junior positions are less attractive to lock liquidity in for an entire week. With more entry and exit points, these pools would fare far better as compared to perpetual swaps.
The assets launched on Optimism have pools for both the standard 1-week and 1-day epoch lengths.
Optimism is an EVM equivalent Optimistic Rollup chain. It’s an Ethereum L2 scaling solution that’s an order of magnitude improvement in transaction throughput while preserving the L1 smart contract developer experience. Optimism allows developers to reuse all the existing tooling on Ethereum with little to no changes in code.
Synthetix is a decentralized synthetic asset issuance protocol. It offers accessibility to real-world currencies, stocks, indices, commodities, and more. The synthetic assets are collateralized by the Synthetix Network Token, which backs the issuance of synthetic assets or Synths.
Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.